KGI Asia Commentary
HSI fell 1 points on Wednesday
The Hang Seng Index fell 1 points or 0.0% to 18,482 on Wednesday. HSTECH fell 39 points or 0.9% to 4,195 and HSCEI fell 30 points or 0.5% to 6,356. Daily market turnover was HK$108.0bn.
The Dow posting its fourth-straight day of gains
The Dow ended higher on Wednesday as signs of a slowing U.S. economy strengthened bets that the Federal Reserve will pause interest rate hikes in September. The Dow Jones Industrial Average rose 0.1%, the Nasdaq rose 0.5% and the S&P 500 rose 0.4%. The S&P 500 technology sector rose, with chipmaker Nvidia up nearly 1%. Shares of Apple (AAPL) rose nearly 2%, a day after the company sent out invitations to its Sept. 12 iPhone 15 launch event. Shares of Hewlett-Packard Co. fell nearly 7% after the company cut its annual profit and free cash flow guidance and reported lower-than-expected second-quarter sales as demand for PCs in China recovered slower than expected. On the other hand, software company Salesforce raised its annual performance forecast on Wednesday. The company reported second-quarter results that exceeded Wall Street expectations and said demand improved in the second half of this year. Shares of Salesforce rose nearly 6% in after-hours trading following the report.
Weak labor market and slower Q2 U.S. growth support Fed pause bets
The labor market continued to show signs of slowing, with data showing fewer jobs were created in August than expected. ADP said private employers added 177,000 jobs in August, slowed sharply from 371,000 in July, and lower than the expected 195,000, alleviating concerns that the tightening labor market will push up wages and inflation. "After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede,” Nela Richardson, chief economist at ADP said Wednesday.
In addition to signs of weakness in the labor market, the latest data on economic growth in the second quarter was also revised down to 2.1% from an initial reading of 2.4%.
Hong Kong Stock Connect had a net inflow of HK$4.5bn on Wednesday, of which HKEX (388) had the largest net inflow, reaching HK$0.64bn; followed by CNOOC (883). Meituan (3690) recorded the largest net outflow at HK$0.2bn, followed by Tencent (700).
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